U.S. Grants Apple 10 Exemptions from Tariffs on Chinese Imports--Update

Date : 09/21/2019 @ 12:41AM
Source : Dow Jones News
Stock : Apple Inc (AAPL)
Quote : 235.28  0.0 (0.00%) @ 11:21AM
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U.S. Grants Apple 10 Exemptions from Tariffs on Chinese Imports--Update

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By Josh Zumbrun and Anthony DeBarros 

WASHINGTON -- The Trump administration has given Apple Inc. a reprieve from tariffs on 10 items, including a power supply and a logic board, that are imported from China.

They were among the $200 billion worth of Chinese imports first targeted for tariffs in September 2018.

The Office of the U.S. Trade Representative on Friday granted Apple exemptions on its Magic Mouse 2, Magic Trackpad 2 and various internal components. The exclusions cover a time period from September 2018 to August 2020, and the U.S. will refund tariffs already paid.

The exclusions do not apply to other Apple items facing tariffs later this year, such as the Apple Watch, iPhones or AirPods, although the tech giant may seek more exemptions in the future.

The dollar value of the exemptions couldn't be determined. Such parts imported from China are subject to tariffs of 25% of their value with the levies scheduled to rise to 30% on Oct. 15.

Five other Apple exemption requests, including power and data cables and a circuit board, are still under review, according to the USTR.

During an earnings call July 30, Tim Cook told analysts that Apple was seeking the exclusions so it could continue assembling some Mac Pros in the U.S. as it began doing with a version launched in 2013. Various parts for the Mac Pro are made in China. "We're explaining that and hope for a positive outcome," he said of the tariff exclusion process.

An Apple spokesman declined to comment further. In seeking individual exclusions, the company said, "There are no other sources for this proprietary, Apple-designed component."

A few days before Mr. Cook's comments, President Trump tweeted: "Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!"

It wasn't clear if any of Friday's exclusions relate to a new Mac Pro Apple revealed in June or an older model made in Austin, Texas, since 2013.

The company planned to assemble the new Mac Pro, which is slated for release later this year, in China, using Taiwanese manufacturer Quanta Computer Inc. It also was making contingency plans to shift production elsewhere, if needed, because of U.S. tariffs.

The USTR didn't say why it granted the specific exemptions Friday.

The trade representative's office has been granting exclusions on a rolling basis for over a year. Only at the end of June could companies apply for relief from the tranche of tariffs on $200 billion worth of goods that took effect in September 2018. The levies were initially set at 10%. But as trade relations with Beijing deteriorated this year, the U.S. raised those tariffs to 25%.

On Friday, the USTR granted exceptions on more than 400 items, primarily applications that had been filed on earlier tranches of tariffs.

Other items granted reprieves included some familiar to consumers, such as miniature Christmas tree light sets and retractable dog leashes. Other exemptions included highly specific and obscure chemicals.

Tripp Mickle in San Francisco and Chad Day in Washington contributed to this article.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com

 

(END) Dow Jones Newswires

September 20, 2019 19:26 ET (23:26 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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